Archive for the ‘paid-for’ Category

This is a great piece of work by Alastair Bruce, content manager for MSN UK, showing how 30 online providers are charging (or not) for their content.

In short, freemium is the most popular model, full subscription the least popular. Micropayments are being used, but not much.

Prediction? Watch the increased use of micropayments as part of a freemium service. And also, watch as some providers stubbornly refuse to charge for content, seeking alternative ways to remain financially sustainable (for example, The Guardian, which is experimenting with all sorts of approaches at present, such as providing its content via an API).

A new report from Nielsen (FT article – subscription required) suggests a third of people around the world (in 52 countries) would be happy to pay for online content.

While this will please many in the newspaper business (notably Rupert Murdoch, who is introducing paywalls for some of News Corporation’s papers this year), the research findings are not quite the equivalent of a reprieve for struggling newspapers.

The bottom line for newspapers is how much they can earn against their operating costs. The margins once enjoyed by papers have been eaten up by plummeting circulations, reducing the revenues they generate from both sales and advertising. This has been exacerbated by people moving online to read their news (and the associated loss of loyalty it is presumed this entails).

Online advertising just doesn’t generate revenues in the way it traditionally did offline, and even online advertising sales have been dropping (these Newspaper Association of America figures make depressing reading if you are in the newspaper industry, and highlight how newspapers online are competing with specialist sites like Craigslist or Gumtree for classified advertising).

So making people pay for newspaper content online is seen by many as the solution (notably not by Alan Rusbridger at The Guardian). As readers of this blog know, I believe this is the solution. Either way, the question that has yet to be answered is this: even if a third of people say they are happy to pay for online content, will the revenue this could potentially generate cover the costs of running a newspaper?

It comes down to a balance between the price newspapers can charge, and the number of subscribers (or people paying micropayments for articles) they keep.

And we will find out whether a profitable balance can be struck later this year, first when News Corp erects its paywalls, and second, when the rest of the newspaper industry decides whether to follow suit.

The editor of The Times, James Harding, yesterday stated that circulation is not the be-all-and-end-all of online newspapers. And he went on to outline a number of ways he can add value for loyal (and presumably, paying) customers.

“We think it’s good for us and good for business to stop encouraging the trickery and fakery of the ABCs. We want real sales to real customers – that’s what our advertisers want too.”

Poll from PR Week: the PR industry should not trample all over social media

When something comes along and breathes life into a staid industry, but has not had time to establish deep roots, we should be careful to preserve it.

Blogging has challenged the media. Every week, bloggers rail against sloppy journalism. For perhaps the first time, there is a democratic and immediate response to any weak-minded argument that makes it onto the pages of a newspaper. It’s David and Goliath stuff, and its refreshing.

Nobody knows how the relationship between blogs and media will develop. So far, it seems bloggers are becoming more skilled and better resourced, potentially challenging journalists. Meanwhile, most journalists I know are being asked to blog as well as write (or, from their perspective, being forced to write more for the same money!).

But the critical difference is that bloggers have not been confined by commercial interests from calling things the way they see them. This is liberating, and is something the mainstream media, with its vested interests, can never hope to compete with entirely.

Which is why its disappointing that it appears blogging is becoming tarnished by a lack of transparency.

In a nice post last weekend, Laurence Borel asked the question – should bloggers be paid to write blog posts? It’s a multi-layered question. Firstly – why not? Good bloggers should be paid, just like good online media should be paid-for.

But the big question is about transparency and the flow of money. The money should flow from the consumers of the blog, rather than from brand owners or companies. Otherwise it reduces blogging to advertising – undisclosed advertising. This would be no more acceptable than if an ‘expert’ sold you a mortgage without telling you they were paid to sell you that particular one. Transparency is the big issue.

We should value the independence of bloggers. Sadly, the credibility of all bloggers will be damaged if there is a perception that they are taking money from the brand owners and companies they blog about. This is why it’s so important that we don’t allow this practice to take hold.

And why it’s so depressing to see that the majority of PR people in the UK have got this one wrong in a PR Week poll. The emergence of social media presents an enormous opportunity for the communications industry. There has never been such demand for watertight strategy and precise implementation of complex and increasingly targeted communications campaigns.

The PR industry should be nurturing social media, not trampling all over it. Under pressure from the media on the one hand and encroaching regulatory scrutiny on the other, blogging is fragile enough. Let the PR industry take a lead in setting out best practice.

Is this worth it? While there is rock-solid logic to the argument for charging for media content when there is a cost associated with its creation and distribution, it’s not clear that issuing threats to sue the BBC will genuinely help the media industry move towards a sensible settlement with its customers.

What’s holding back online media is a lack of micropayment standards to allow them to make money from their work. The focus should be on the establishment of a standard that allows users to pay for what they use, without onerous barriers to entry (so a mix of prepay and post-billed options would make sense).

Even if this is merely the opening parry in what could turn out to be a prolonged negotiation through lawyers and the media, its disappointing that News Corporation’s reputation with anyone other than shareholders seems to have passed the old dog by on this occasion.

I’m not suggesting Murdoch should be operating on behalf of anyone other than his own shareholders… but could you imagine Google looking after its own interests in such a blunt and one-dimensional way?

Rupert Murdoch once again gave a boost to media-by-subscription at yesterday’s Goldman Sachs Communacopia conference in New York. In a speech where he reported a rebound in the advertising market, he reiterated that News Corp media had plans to increase non-advertising revenue.

The media is now lining up behind the idea that there is money to be made through subscriptions, via either a ‘freemium’ model, offering additional benefits to subscribers, or through micro-payments.

Their long reluctance to go down the paid-for route online suggests that their former view – that ad revenue lost through reduced reader/viewer figures could not be recouped by subscriptions – has changed.

So what makes the subscription model seem so appealing now? Here are three suggestions:

Ad revenue per media channel is projected to fall so far in the near future that the subscription model is now viable. This is quite conceivable, given the proliferation of media channels.

New technologies such as mobile devices and electronic readers offer a point of difference worth paying for. With Spotify and the Wall Street Journal just two channels offering mobile content for a fee, it suggests mobile devices could boost subscriptions in a previously unachievable way. As Murdoch said at Communacopia : I do certainly see the day when more people will be buying their newspapers on portable reading panels than on crushed trees.

The mainstream media now believes it can corner the market for paid-for news/analysis. Recent moves to centralise electronic media behind specific techologies, such as mydigitalnewspaper.com , Google Fast Flip and Journalism Online (which is specifically a payments system) mean the mainstream media may increasingly be able to behave like a cartel. Early moves towards paid-for models by the Financial Times and New York Times may be followed by a mass shift to paid-for online news.

Paid-for online services should theoretically be more customer-focused and financially sustainable than those that are ad-funded – but if pricing were to be set in an uncompetitive way, that would be an unfortunate outcome.

Rupert Murdoch has done it. As suggested at News International’s last quarterly earnings call, he says his online newspaper portfolio will begin migrating towards a paid-for model within the next financial year.

Murdoch is in a unique position in the media – where he goes, he stands a very real chance that others will follow. What this means is, while the skeptics are right that charging people for content will drive his audience to rival online sources, they are also missing a key dynamic: if the others start charging too, there will be nowhere to go.

The problem for online newspapers since they began giving away their content free has been the fragmented system online – news just leaks. But if all – or even just a proportion – of the online newspaper community moves as one, this could work to everyone’s advantage. As Andrew Keen says:

The holy grail of the digital economy is discovering how to get consumers to spend money on content. Nobody has figured this out yet.

So from now on, watch this space for other newspaper groups to announce ‘trials’, and in the longer term, a raft of lawsuits issued in response to plagiarism.